WASHINGTON–A “first peek” at full-year 2020 performance data for credit unions reveals what many CU leaders already know: It was a big year for savings and a poor year for lending outside of one category.
CUNA’s newest Monthly Credit Union Estimates, available here, show member savings in 2020 were 21% higher than 2019, almost solely due to the coronavirus pandemic and the economic slowdown.
“Consumers, not surprisingly, kept those balances short and liquid,” said Mike Schenk, deputy chief advocacy officer for policy analysis and chief economist with CUNA. “There was relatively weak loan growth, 5%, propelled almost completely by first mortgage growth, up 11%.”
Schenk said the 4% decline in new auto loans was essentially offset by the 4% increase in loans for used cars by credit unions. During 2020, unsecured loans were up by 1%, while home equity loans and second mortgages declined by 4% as consumers mostly focused on new home purchases.
All of those savings and the lagging loans pushed the CU industry loan-to-share ratio down to 73.6%, a low not seen since 2015, said Schenk. Credit unions placed the excess liquidity into investments that were yielding close to zero, observed Schenk, who called it “a pretty big deal.”
‘Really Stands Out’
“One other thing related to loans that really stands out is the effect the fiscal stimulus and relief had on asset quality,” said Schenk. “At the end of 2020, asset quality really improved to a .61% delinquency rate.”
Meanwhile, while CU membership growth slowed during 2020, Schenk described it as “very strong,” noting the number of total members in U.S. credit unions was up 3.1% during 2020, a slight decrease from the 3.6% rate posted in 2019.
But overall population growth was up just .5% he said, meaning CU membership grew seven times faster than the U.S. population, he said.
“It’s a reflection of the commitment to staying engaged and helping people during the pandemic,” Schenk said.